Canada’s economy expanded modestly at the end of 2025.
Real gross domestic product rose 0.2% in December.
The manufacturing sector rose 1.2% after contracting in October and November. Durable-goods manufacturing increased 1.8%, helped by a 6.6% rebound in machinery manufacturing. Transportation equipment edged down, as gains in motor vehicle manufacturing were offset by declines in parts and trailer production.
Non-durable manufacturing rose 0.5%, the first increase in three months. Chemical manufacturing, food manufacturing, and plastics and rubber products contributed to the gain.
Wholesale trade increased 1.7%, recovering from a November decline. Motor vehicle and parts wholesalers jumped 10.9% as passenger car imports rebounded. Machinery and equipment wholesalers also posted a second straight monthly gain. Food, beverage and tobacco wholesalers declined.
Utilities rose 2.7% in December. Higher hydroelectric generation and increased natural gas distribution supported the gain due to colder weather in western provinces.
The public sector grew 0.2%. Health care and social assistance were essentially unchanged, despite an ambulance workers’ strike in Quebec.
Transportation and warehousing increased 0.7%. In contrast, mining, quarrying, and oil and gas extraction fell 0.9%, as oil and gas output declined.
Preliminary estimates suggest real GDP was essentially unchanged in January 2026.
Despite the increase, it looks like the economy edged down 0.1% in the fourth quarter. Manufacturing fell 1.5% in the quarter, its third quarterly decline of the year. Durable-goods manufacturing dropped 3.0%, with machinery, wood products, transportation equipment and fabricated metals contributing most to the weakness.
Wholesale trade declined 1.4% in the fourth quarter, while educational services fell 1.7% due to a provincewide teachers’ strike in Alberta.
Among goods-producing industries, mining, quarrying, and oil and gas extraction rose 4.0%. Construction increased 2.3%, its first annual gain since 2022.